IHH 3Q net profit rises 77% y-o-y to RM550 mil from steady return of patients, provision of Covid-19 support services

IHH 3Q net profit rises 77% y-o-y to RM550 mil from steady return of patients, provision of Covid-19 support services
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KUALA LUMPUR (Nov 29): IHH Healthcare Bhd said in a statement on Monday (Nov 29) that it had registered a net profit of RM550 million for its third quarter ended Sept 30, 2021 (3QFY21), a 77% increase from last year’s RM309.95 million, on the back of a rebound in performance, driven by factors that include patients returning to its hospital services network and contributions from Covid-19 services rendered, as well as maintaining cost discipline.

Earnings per share for the healthcare group rose to 6.01 sen compared with 3.28 sen, its filing showed.

IHH also reported that its stringent cost controls helped it grow its EBITDA (earnings before income tax, depreciation and amortisation) by 32% to RM1.1 billion from RM832.74 million last year, and remarked that all its key markets such as Malaysia, Singapore, India and Greater China have seen improved performance, specifically its Gleneagles Hong Kong Hospital, which reported a positive EBITDA in 3QFY21.

IHH also managed to expand its revenues by 26% to RM4.44 billion from RM3.52 billion a year prior, attributed to more patients returning to its hospitals for treatments despite disruptions and movement controls from resurging Covid-19 outbreaks. The group added that the consolidation of its DDRC SRL Diagnostics and Prince Court Medical Center had also contributed, while it continued to actively support the public healthcare sector through Covid-19 related services such as treating of Covid-19 patients, screening, laboratory testing and vaccination services.

“Performance continued to rebound as patients returned to our hospital services network, and as we continue to prioritise Covid-19 support to help governments in some of our countries. Our efforts to optimise our capital structure and operations have started to pay off. Gleneagles Hong Kong Hospital delivered a positive EBITDA in the third quarter, while Turkey and India operations have recovered fully and are geared for continued expansion.

“Our growth from here will be driven both organically and inorganically. We are also making innovation investments as part of our digital transformation roadmap to seize disruptive opportunities that will give patients better, faster and affordable care. As we emerge from the pandemic, IHH will not lose sight of our purpose to touch lives and transform care, keeping our people and patients safe,” IHH Healthcare’s managing director and CEO, Dr Kelvin Loh, said in the statement.

For its nine months ended Sept 30, 2021 (9MFY21), the group said its revenue, EBITDA and net profit had improved to RM12.7 billion, RM3.2 billion and RM1.4 billion, from RM9.64 billion, RM1.83 billion and a net loss of RM130.48 million respectively last year.

Operationally, the group said its return on equity (ROE) had reached 8.2% in its 3QFY21, while it had supported governments in Covid-19 efforts across its international network, specifically in Singapore, where its Parkway Laboratory Services was awarded the contract by Changi Airport Group to be one of two laboratory vendors to provide Polymerase Chain Reaction (PCR) tests for on-arrival travellers at Changi Airport starting November 2021, and it had allocated about 230 beds to treat Covid-19 patients at its IHH Singapore hospitals, while in Turkey, its Dalaman YDA Airport Acibadem PCR Laboratory has been operational since June 1, 2021 to perform PCR tests for passengers 24/7. 

“With operations returning to normalcy, we expect revenues from Covid-19 services to gradually decrease.

“The group also expects staff costs to rise, as we strengthen our clinical talent across our hospital services network with a strong return of core non-Covid business,” it said.

IHH added that it will extract synergies from its international network; driving efficient growth through reviewing opportunities to expand into new or established earnings accretive clusters; proactively diversifying into new revenue streams including diagnostics and laboratory services, improving case mix, partnering and supporting public health organisations; and embarking on a patient-centric digital transformation roadmap over the next few years to deliver better, seamless and affordable care for our patients to further drive the group’s business performance.

“Our long-term growth trajectory remains solid, and we are poised for sustainable growth in the new normal, as we stay guided by our vision to be the world’s most trusted healthcare services network,” IHH Healthcare’s statement wrote on its outlook.

IHH Healthcare’s stock ended Monday 4 sen or 0.61% higher at RM6.60, with a market capitalisation of RM58 billion.

Joyce Goh